|
“Jason, you’ve got your head stuck in the clouds!”
As a kid, I’d spend a lot of time in my yard looking up at the sky for animals and faces in the clouds. I’m sure I’m not alone.
Nowadays, though, “the cloud” elicits something altogether different: cloud computing.
The cloud is everywhere. And most people interact with it daily.
Smartphones are almost entirely cloud-based now. I take oodles of pictures on my phone. But I never worry about losing them because they are backed up on the cloud.
In fact, my entire phone is on the cloud. How many of you have gone swimming with your smartphone? I have three times. (Whoops.) But once I bought a new device, I just selected “restore from backup,” and I was back in business… thanks to the cloud.
And when was the last time you installed a CD on your computer? That’s called a local installation. But many of us don’t even have CD drives on our machines anymore.
Instead, we install software with web-based apps and “sync” updates. Anyone using Microsoft’s Office 365 or Google Docs, for example, is interfacing with the cloud. The same applies to most cybersecurity offerings. And small businesses will find multiple customer relationship management (CRM) software options in the cloud.
To operate in today’s modern world, you simply must interact with the cloud.
Even if you do none of the above and choose to live humbly… the odds are your entire medical history is stored on the cloud when you visit the doctor. So is your credit record, your residence history, voting registration… and on and on.
Not only has the cloud changed the way we live our lives, but it is also here to stay – forever.
Barring a new “dark ages” where our tech systems collapse, all of our heads are now stuck in the clouds.
So it makes sense to invest in the booming cloud space.
But as I’ve just shown, the cloud isn’t just one thing. It plays a critical role in many different industries. As a result, trying to figure out the best place to invest can be head-spinning.
That’s why today, I’m going to show you a simple way to take advantage of this growing tech trend…
Putting AI to Work
Hi, I’m Jason Bodner. I’m the editor of Outlier Investor here at Brownstone Research.
As many longtime readers know, founder Jeff Brown has been a high-tech investor for decades. And he believes technology will drive our human and economic evolution for years to come.
That’s why he asked me to join him in his mission at Brownstone Research. He saw the technology behind my invention and knew he had found something special.
You see, I look for “outliers” in the stock market. Those are the few stocks that outpace the rest of the market.
And I use an artificial intelligence (AI) system I’ve built to scan 6,500 stocks every day. This AI looks for when the biggest investors are buying the best quality stocks.
That’s how I find my outlier stocks. My AI essentially does it for me!
And once Jeff saw this, he knew he had to have this tech on his side.
So what is my AI system saying about investing in the cloud right now? The good news is my system can help make these kinds of investing decisions simple…
Gaining Exposure to the Cloud
Like I mentioned above, my AI system looks for stocks that Big Money investors are buying. These are hedge funds… institutional players… and financial firms. When they buy, it’s not just 100 shares… they’ll buy hundreds of thousands or even millions of shares. That’s enough to move the stock price over time in our favor.
But that’s not all.
My AI isolates the stocks with the best fundamentals – like growing sales and earnings as well as high-profit margins. This ensures we’re investing in strong companies we want to hold on to.
And that can help us find a way to invest in cloud computing stocks and keep it simple too.
Because my system doesn’t just look at individual stocks… it can also analyze ETFs – exchange-traded funds.
We can think of ETFs like old-school mutual funds with a basket of investments… Except we can trade an ETF all day, every day, like a stock.
But as of 2020, there were over 7,600 ETFs, representing about $7.74 trillion in assets. How on earth can you figure out which one to pick for exposure to the cloud?
I do it like this: I have my AI look at when big investors are buying relevant ETFs. Then my AI software ranks each ETF for strength according to the individual stocks they hold – it’s basically an extension of what my software can do with an individual stock!
And guess what?
Recently, big money has been buying a certain ETF that’s focused on cloud computing: Global X Cloud Computing ETF (CLOU). The green bars in the chart below are buy signals:
But like I said, buying alone is not enough. I need to know that the ETF holds great stocks – businesses that have longevity and a path for growth over the long run.
And CLOU certainly does. It holds amazing stocks like Microsoft, Amazon, and Google. But unlike in stock indexes like the S&P 500, these three stocks only account for 5.25% of the CLOU ETF. That means those three big names won’t outweigh the other promising stocks in CLOU.
In fact, the top five stocks in CLOU – according to my system’s ranking – together make up 27% of CLOU’s holdings. That’s good news – it means it’s giving us exposure to real cloud companies my system likes – not just the top S&P holdings.
Of course, every holding in CLOU probably isn’t a home run. That’s why I try to help my followers identify just the winners. And we’re currently holding a few of CLOU’s holdings in the Outlier Investor portfolio.
In my Outlier Investor service, I go in-depth about these stocks. So if you’re interested in finding out more about which specific stocks my Outlier Investor system has identified, simply click here.
But either way, CLOU gives us a simple, easy approach to investing in the cloud computing revolution of both now and the future.
It turns out my mom was right after all… I do have my head stuck in the clouds.
Maybe you should join me…
Talk soon,
Jason Bodner
Editor, Outlier Investor
Like what you’re reading? Send your thoughts to [email protected].